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This paper highlights that real interest rates in Brazil have declined substantially over time, but are still well above the average of emerging market inflation targeting regimes. The adoption of an inflation-targeting regime and better economic fundamentals (reduction in inflation volatility and improvements in the fiscal and external positions) has helped Brazil sustain significantly lower real interest rates than in the past. Going forward, the paper shows that Brazil can converge towards lower equilibrium real interest rates if domestic savings increase to the level of other emerging market countries. The effect is particularly pronounced if the increase in domestic savings is achieved through higher levels of public savings. Still, econometric results suggest that, controlling for everything else in the model, real interest rates in Brazil are about two full percentage points higher than in other countries in the sample, suggesting that there are still Brazil-specific factors that have not been captured by the empirical analysis. Some of these factors may include credit market segmentation and inflation inertia generated by still pervasive indexation practices.

Interest rates --- Money market rates --- Rate of interest --- Rates, Interest --- Interest --- Econometric models. --- Banks and Banking --- Finance: General --- Inflation --- Macroeconomics --- Money and Monetary Policy --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Interest Rates: Determination, Term Structure, and Effects --- Monetary Policy --- 'Panel Data Models --- Spatio-temporal Models' --- Macroeconomics: Consumption --- Saving --- Wealth --- Price Level --- Deflation --- General Financial Markets: General (includes Measurement and Data) --- Finance --- Monetary economics --- Real interest rates --- Domestic savings --- Inflation targeting --- Emerging and frontier financial markets --- Financial services --- National accounts --- Monetary policy --- Prices --- Financial markets --- Saving and investment --- Financial services industry --- Brazil

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A number of emerging markets have experienced substantial real exchange rate appreciation in recent years, generating concerns about competitiveness and prompting policymakers to respond with a combination of mitigating policies. This paper shows that fiscal policy can play a role in alleviating these pressures. Using a sample of 28 emerging market economies over 1983-2011, we estimate a dynamic model of the real exchange rate and find that a permanent fiscal adjustment may reduce appreciation pressures over the long term. Furthermore, the composition of public spending matters, with reductions in current spending playing a key role. To illustrate the importance of these findings, the paper focuses on the case of Brazil. Our results suggest that maintaining fiscal discipline while increasing public investment in Brazil is likely to ease real appreciation pressures, highlighting the importance of tackling long-standing budget rigidities.

Foreign exchange. --- Cambistry --- Currency exchange --- Exchange, Foreign --- Foreign currency --- Foreign exchange problem --- Foreign money --- Forex --- FX (Finance) --- International exchange --- International finance --- Currency crises --- Foreign Exchange --- Public Finance --- Fiscal Policy --- Open Economy Macroeconomics --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Currency --- Foreign exchange --- Macroeconomics --- Public investment spending --- Public investment and public-private partnerships (PPP) --- Real exchange rates --- Expenditure --- Fiscal policy --- Public investments --- Public-private sector cooperation --- Expenditures, Public --- Brazil

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Subsidy reform has been a key component of the pre-accession reform agenda of the 10 new member states that joined the EU in 2004 (EU-10). During the pre-accession period, these countries had to undertake a number of important structural reforms in their economies. One of the most critical reforms was to reduce, and in some cases, eliminate their subsidy programs. This paper analyzes how key subsidy reforms (in state aid to enterprises, agriculture, energy, and transportation) were carried out in the EU-10 during 1995–2005, and explains observed variations across types of subsidies and across countries. Based on an extensive qualitative analysis, the paper draws lessons for future successful reforms of government subsidies. 32B.

Subsidies --- Business subsidies --- Corporate subsidies --- Corporate welfare --- Government subsidies --- Grants --- Subventions --- Vouchers (Subsidies) --- Welfare, Corporate --- Government aid --- Foreign trade promotion --- Trade adjustment assistance --- Infrastructure --- Public Finance --- Taxation --- Agribusiness --- Industry Studies: Transportation and Utilities: General --- Energy: Demand and Supply --- Prices --- National Government Expenditures and Related Policies: General --- Agricultural Policy --- Food Policy --- Trade Policy --- International Trade Organizations --- Macroeconomics --- Public finance & taxation --- Energy industries & utilities --- Agricultural law --- Transportation --- Energy subsidies --- Agricultural policy --- Tariffs --- Saving and investment --- Expenditures, Public --- Agriculture and state --- Tariff --- Czech Republic

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Governance and corruption issues have taken the center stage in international discussions, especially after the adoption by the IMF in 2018 of a new framework for engagement on governance and corruption. Sound institutions that guarantee integrity in the management of public affairs are critical on the path toward higher and more inclusive growth. Corruption undermines the quality of institutions, weakens the effectiveness of government programs, and compromises social trust in government policies. Indeed, countries around the world that improved their governance systems are reaping a "governance dividend," and governance-enhancing reformist countries in sub-Saharan Africa include Botswana, Rwanda, and Seychelles. In addition, Liberia, Sierra Leone, and Angola demonstrate that important reforms are possible, including in fragile environments. The importance of good governance has acquired even more importance as countries try to introduce policies to fight the ongoing COVID-19 pandemic. Special attention to governance in an emergency context, including situations associated with conflict, other health crises and natural disasters, is therefore essential. Innovation and new technologies are critical instruments that policymakers can use in their efforts to improve governance and transparency.

Political corruption.

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institutions politiques --- openbare orde --- nationalisme --- revolutie --- politieke instellingen --- ordre public --- revolution --- Assistance, Technical --- Assistance, Technological --- Technological assistance --- Fiscal policy --- Technical assistance --- Economic assistance --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- International Monetary Fund. --- Internationaal monetair fonds --- International monetary fund --- International finance --- International groups --- International Monetary Fund --- IMF. --- Fiscal policy. --- Technical assistance.